RBA expected to hike rates by 25 bps each month to May 2023 – Goldman Sachs

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Analysts at Goldman Sachs expect the Reserve Bank of Australia (RBA) to raise their terminal rate to 4.1% from 3.6% previously.

“We do not expect the RBA will risk falling too far behind a synchronized global tightening cycle.”

“All considered, we now expect plus 25 basis point rate hikes each month to May 2023 (inclusive) to a terminal rate of 4.1% followed by 110 basis points of easing over 2024 to 3%.”

“In context, our revised terminal rate forecast sits around the hawkish extreme of peer economist expectations but is broadly in line with pricing in financial markets. We see risks to our forecast in both directions.”

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